The Central government said one-time financial assistance will be given to individuals and companies to set up torrefaction and pelletisation plants to ensure a regular supply of paddy straw for co-firing in thermal power plants and industries.

The setting up of these plants will help resolve the problem of stubble burning and generate income for farmers, Union Environment Minister Bhupender Yadav said at a workshop on "Guidelines for grant of one-time financial support for establishment of pelletisation and torrefaction plants to promote utilisation of paddy straw".

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Along with unfavourable meteorological conditions, paddy straw burning in Punjab and Haryana is a major reason behind the alarming spike in air pollution levels in the national capital in October and November. Farmers set their fields on fire to quickly clear off the crop residue before cultivating wheat and potato.

According to government data, Punjab and Haryana generate around 27 million tonnes of paddy straw annually, of which about 6.4 million tonnes are not managed.

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To address air pollution issue and to reduce the carbon footprint of thermal power plants and industries, the government had earlier mandated co-firing of 5 to 10 per cent biomass along with coal.

The government noted that there is a demand for biomass by power plants, “the supply is on the lower side ... due to slow/limited growth of aggregators/suppliers”.

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"Therefore, there is a need to facilitate setting up of pelletisation plants so that paddy straw is utilised and the issue of crop burning and pollution is further addressed," read the guidelines prepared by the Union Environment Ministry.

Guideline details

According to the guidelines, financial support of ₹14 lakh per tonne per hour plant production capacity (subject to a maximum of ₹70 lakh per proposal) will be given for setting up new pelletisation units.

₹28 lakh per tonne per hour plant production capacity will be provided for torrefaction plants, subject to total financial support of ₹1.4 crore per proposal.

The government has earmarked ₹50 crore for utilisation under the guidelines.

The financial assistance can be availed by individuals and companies setting up new plants and units using only paddy straw generated in Delhi, Punjab and Haryana, and NCR districts of Rajasthan and Uttar Pradesh.